Financial Data and Key Metrics Changes - For Q4 2024, the company reported net income of $24.3 million, or $0.20 per diluted share, with pre-provision net revenue of $40 million, up 14% from Q3 2024 [9][10] - Total deposits decreased by 3% to $14.3 billion, influenced by the sale of Virginia branches and typical year-end fluctuations [14] - Net interest income totaled $102 million, a decrease of 3% from Q3 2024, with a net interest margin of 2.50%, down 5 basis points quarter-over-quarter [19][20] Business Line Data and Key Metrics Changes - Loans receivable stood at $13.6 billion, up 1% on an annualized basis from June 30, 2024, with a 2% increase in average gross loans quarter-over-quarter [11][16] - Non-interest income increased by 34% to $16 million, driven by gains on SBA loans and improved customer activity [21] - Non-interest expense was $78 million, down 5% from the prior quarter, reflecting disciplined expense management [22] Market Data and Key Metrics Changes - The company focused on reducing broker deposits to 7% of total deposits, down from 10% a year ago [11] - The competitive environment for deposits remains high, impacting overall funding costs [62] Company Strategy and Development Direction - The company aims for loan growth in the high single-digit percentage range in 2025, driven by organic growth and the addition of Territorial Bancorp's loans [30] - The strategic focus includes improving the deposit mix, organic loan growth, and strong fee income growth [12] - The company anticipates closing the merger with Territorial Bancorp in Q1 2025, which is expected to enhance profitability and growth [13][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, expecting accelerated earnings growth and profitability [12] - The company is committed to disciplined expense management while investing in talent and technology [32] - The effective tax rate is projected to be around 20% for 2025, benefiting from low-income housing and investment tax credits [32] Other Important Information - The company declared a quarterly common stock dividend of $0.14 per share, payable on February 20, 2025 [14] - Asset quality remains stable, with non-performing assets down 13% quarter-over-quarter [26] Q&A Session Summary Question: Outlook on deposit beta - Management aims to achieve a higher beta than the past cycles, targeting around 80% with proactive measures [38][39] Question: Expense run rate and contributions from Territorial - The 2025 expense growth guidance includes transitional costs from Territorial, with a focus on disciplined expense management [42][44] Question: Securities accretion and transition acceleration - The company is evaluating the securities portfolio and has not specified the accretion from securities yet [50][56] Question: Deposit trends and competitive environment - The competitive pricing environment remains challenging, but the company achieved a 42% beta on interest-bearing deposits [62][64] Question: Loan growth outlook and charge-offs - The company expects moderate loan growth from the C&I side, with manageable charge-off levels anticipated for 2025 [75][77]

2024 Fourth Quarter Earnings Conference Call January 27, 2025 Forward Looking Statements & Additional Disclosures Some statements in this presentation may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words "will," "believes," "expects," "anticipates," "inten ...

Core Insights - Hope Bancorp reported a revenue of $118.02 million for the quarter ended December 2024, reflecting a 12.7% decrease year-over-year [1] - The company's EPS was $0.20, down from $0.32 in the same quarter last year, with a surprise of +5.26% compared to the consensus estimate of $0.19 [1] - The stock has returned -1.5% over the past month, underperforming the Zacks S&P 500 composite's +1.1% change, and currently holds a Zacks Rank 4 (Sell) [3] Financial Metrics - Efficiency Ratio was reported at 65.8%, slightly above the estimated 65.6% [4] - Net Interest Margin was 2.5%, below the estimated 2.6% [4] - Net charge-offs to average loans were 0.4%, higher than the estimated 0.2% [4] - Average Balance of Total interest-earning assets was $16.27 billion, below the estimated $16.50 billion [4] - Net Interest Income was $102.14 million, compared to the estimated $109.26 million [4] - Net gains on sales of SBA loans were $3.06 million, exceeding the estimated $2.91 million [4] - Total noninterest income was $15.88 million, surpassing the average estimate of $12.74 million [4] - Service fees on deposit accounts were $2.81 million, slightly below the estimated $2.85 million [4]

Core Viewpoint - Hope Bancorp reported quarterly earnings of $0.20 per share, exceeding the Zacks Consensus Estimate of $0.19 per share, but down from $0.32 per share a year ago, indicating a 37.5% year-over-year decline in earnings [1][2] Financial Performance - The company posted revenues of $118.02 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 2.47% and down from $135.2 million year-over-year, reflecting a 12.9% decrease [2] - Over the last four quarters, the company has surpassed consensus EPS estimates only once [2] Stock Performance - Hope Bancorp shares have declined approximately 1.4% since the beginning of the year, while the S&P 500 has gained 3.7% [3] - The current Zacks Rank for Hope Bancorp is 4 (Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.26 on revenues of $136.1 million, and for the current fiscal year, it is $1.19 on revenues of $568.37 million [7] - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [6] Industry Context - The Banks - West industry, to which Hope Bancorp belongs, is currently in the top 36% of over 250 Zacks industries, suggesting a relatively strong industry performance [8]

Financial Performance - For Q4 2024, net income was $24.3 million, or $0.20 per diluted common share, compared to $24.2 million in Q3 2024[2] - Full-year 2024 net income totaled $99.6 million, or $0.82 per diluted common share, with notable items adjusted net income at $103.4 million, or $0.85 per diluted common share[2] - Net income for the three months ended December 31, 2024, was $24,337, an increase of 1% from $24,159 in the previous quarter, but a decrease of 8% from $26,481 in the same quarter last year[30] - The total revenue for the three months ended December 31, 2024, was $118,016 thousand, a decline of 12.7% from $135,196 thousand for the same period in 2023[51] - The net income excluding notable items for the twelve months ended December 31, 2024, was $103,380 thousand, down 28.6% from $144,646 thousand for the same period in 2023[51] Revenue and Income Sources - Pre-provision net revenue (PPNR) for Q4 2024 increased 14% to $40.4 million from $35.4 million in Q3 2024[5] - Noninterest income rose 34% to $15.9 million in Q4 2024, driven by net gains on the sale of SBA loans and increased customer activity[8] - Total noninterest income increased by 34% from $11,839 in the previous quarter to $15,881 in the current quarter, and increased by 71% from $9,280 in the same quarter last year[30] - The pre-provision net revenue (PPNR) for the three months ended December 31, 2024, was $40,426 thousand, compared to $36,005 thousand for the same period in 2023, reflecting an increase of 11.8%[51] Asset and Liability Management - Total deposits decreased by $402 million, or 3%, to $14.33 billion from $14.73 billion in Q3 2024, influenced by the sale of Virginia branches[12] - Total assets decreased by 2% from $17,354,189 on September 30, 2024, to $17,054,008 on December 31, 2024, and decreased by 11% compared to $19,131,522 on December 31, 2023[28] - Total liabilities decreased by 2% from $15,184,404 on September 30, 2024, to $14,919,503 on December 31, 2024, and decreased by 12% compared to $17,010,279 on December 31, 2023[28] - Total deposits amounted to $14,590,767 with an interest expense of $121,645, resulting in a cost of 3.32%[34] Credit Quality and Loss Provisions - Nonperforming assets decreased to $90.8 million, or 0.53% of total assets, down from $103.8 million, or 0.60% at the end of Q3 2024[15] - The provision for credit losses increased to $10.0 million in Q4 2024 from $3.3 million in Q3 2024, with a full-year provision of $17.3 million compared to $31.6 million in 2023[17] - The allowance for credit losses totaled $150.5 million at December 31, 2024, with an allowance coverage ratio of 1.11% of loans receivable[18] - Net charge offs for Q4 2024 were $12.8 million, or 0.38% of average loans, compared to $5.7 million, or 0.17% in Q3 2024[16] Capital Position - The tangible common equity ratio was over 10% as of December 31, 2024, indicating strong capital position for future growth[2] - The Common Equity Tier 1 Capital Ratio was 13.06%, exceeding the minimum guideline of 6.50% for "well-capitalized" institutions[20] - Total stockholders' equity was $2.13 billion, or $17.68 per common share, down from $2.17 billion, or $17.97 per common share at the end of Q3 2024[20] - Stockholders' equity rose by 5% year-over-year to $2,156,858,000 from $2,048,335,000[38] Mergers and Acquisitions - The company is preparing for the integration of Territorial Savings Bank, expected to complete in Q1 2025, enhancing its deposit base and asset quality[2] - Hope Bancorp is in the process of merging with Territorial Bancorp Inc., with regulatory approvals pending[24] Efficiency and Ratios - The efficiency ratio improved to 65.75% for the three months ended December 31, 2024, compared to 69.67% in the previous quarter and 73.37% in the same quarter last year[32] - The diluted EPS excluding notable items for the three months ended December 31, 2024, was $0.20, down from $0.31 for the same period in 2023[51] - The return on average assets (ROA) for the three months ended December 31, 2024, was 0.57%, slightly up from 0.56% in the previous quarter and up from 0.54% in the same quarter last year[32] - The return on equity (ROE) excluding notable items for the three months ended December 31, 2024, was 4.46%, down from 7.25% in the same period last year[51]

Group 1 - Analysts project that Hope Bancorp (HOPE) will announce quarterly earnings of $0.19 per share, a decline of 40.6% year over year [1] - Revenues are expected to reach $121 million, declining 10.5% from the same quarter last year [1] - The consensus EPS estimate has not been revised over the past 30 days, indicating a stable outlook from analysts [2] Group 2 - The average prediction for 'Average Balance - Total interest earning assets' is $16.50 billion, down from $18.53 billion a year ago [5] - The consensus estimate for 'Net Interest Income' is $109.26 million, compared to $125.92 million reported in the same quarter last year [5] - Analysts estimate 'Total noninterest income' at $12.74 million, an increase from $9.28 million reported in the same quarter last year [6] Group 3 - Hope Bancorp shares have returned -1.5% over the past month, while the Zacks S&P 500 composite has changed by +2.1% [7] - With a Zacks Rank 4 (Sell), HOPE is expected to underperform the overall market in the near future [7]

Financial Performance - Net income for the third quarter of 2024 was $24.16 million, compared to $30.05 million in the same quarter of 2023, reflecting a decrease of about 19.6%[230]. - Net income for Q3 2024 was $24.2 million, a decrease of 19.6% from $30.0 million in Q3 2023[241]. - Net income for the nine months ended September 30, 2024, was $75.3 million, down 29.8% from $107.2 million for the same period in 2023[242]. - Noninterest income for Q3 2024 increased by $3.5 million, or 42.6%, totaling $11.8 million compared to $8.3 million in Q3 2023[268]. - Total noninterest income for the nine months ended September 30, 2024, was $31.2 million, a decrease of $5.1 million, or 14.1%, from $36.3 million in the same period of the prior year[270]. Asset Quality - The provision for credit losses decreased significantly to $3.28 million from $16.86 million year-over-year, indicating improved asset quality[230]. - Provision for credit losses for Q3 2024 was $3.3 million, a decrease of $13.6 million from $16.9 million in Q3 2023[263]. - The allowance for credit losses (ACL) was $153.3 million at September 30, 2024, down from $158.7 million at December 31, 2023, representing 1.13% of loans receivable[300][302]. - Nonperforming assets totaled $103.8 million at September 30, 2024, up from $45.5 million at December 31, 2023, with a nonperforming assets to total assets ratio of 0.60% compared to 0.24%[298][299]. Interest Income and Expenses - Net interest income for the three months ended September 30, 2024, was $104.81 million, down from $135.38 million in the same period last year, representing a decline of approximately 22.6%[230]. - Net interest income for Q3 2024 was $104.8 million, a decrease of 22.6% from $135.4 million in Q3 2023[244]. - The net interest margin for Q3 2024 was 2.55%, a decrease of 28 basis points from 2.83% in Q3 2023[246]. - Total interest income decreased by $52.3 million, with loans contributing a decrease of $38.2 million and interest-earning cash and deposits decreasing by $18.4 million[260]. - The total interest expense decreased by $10,140 thousand, leading to a net interest income decrease of $30,569 thousand for the same period[259]. Capital Position - The tangible common equity (TCE) ratio improved to 10.08% from 7.96% year-over-year, indicating stronger capital position[230][232]. - Common equity tier 1 capital ratio was 13.07% at September 30, 2024, indicating a strong capital position[328]. - Stockholders' equity increased to $2.17 billion at September 30, 2024, up from $2.12 billion at December 31, 2023, driven by net income of $75.3 million[325]. - The company is categorized as "well capitalized" with a common equity tier 1 capital ratio of 13.07% and total capital ratio of 14.82% as of September 30, 2024[328]. Liquidity and Borrowing - Cash and cash equivalents decreased to $680.9 million at September 30, 2024, from $1.93 billion at December 31, 2023, primarily due to the payoff of $1.70 billion of FRB BTFP borrowings[286]. - Total borrowing capacity, cash and cash equivalents, and unpledged securities amounted to $7.57 billion at September 30, 2024, down from $7.66 billion at December 31, 2023[333]. - The company has $4.15 billion available to borrow from the FHLB, with $4.05 billion unused as of September 30, 2024[333]. - The liquidity management strategy focuses on maintaining sufficient funds to meet cash flow requirements arising from fluctuations in deposit levels and daily operations[331]. Operational Efficiency - The efficiency ratio for the quarter was 69.67%, up from 60.42% in the previous year, suggesting increased operational costs relative to income[231]. - Noninterest expense for Q3 2024 was $81.3 million, a decrease of $5.5 million, or 6.4%, from $86.8 million in Q3 2023[274]. - Salaries and employee benefits decreased by $6.9 million, or 13.5%, to $44.2 million in Q3 2024 from $51.0 million in Q3 2023[275]. - Salaries and employee benefits expense decreased by $24.7 million, or 15.4%, for the nine months ended September 30, 2024, compared to the same period in 2023, due to headcount reductions[277]. Shareholder Returns - The bank declared cash dividends of $0.14 per common share, consistent with the previous year[230]. - The number of common shares outstanding increased to 120,737,908 from 120,026,220 year-over-year, reflecting a slight increase in equity[230]. - The company has $35.3 million remaining under its $50 million stock repurchase plan as of September 30, 2024[326].

Financial Data and Key Metrics Changes - For Q3 2024, the company reported net income of $24.2 million or $0.20 per diluted share, with adjusted net income of $25.2 million and earnings per share of $0.21, primarily impacted by merger-related notable items [9] - Customer deposits grew 11% annualized from June 30, 2024, while loans receivable increased by 2% annualized during the same period [8] - The total capital ratio was 14.8% and the tangible common equity ratio was 10.1% as of September 30, 2024, marking the highest levels since the merger with Wilshire in 2016 [10] Business Line Data and Key Metrics Changes - Loans receivable, excluding loans held for sale, increased by $51 million from June 30, 2024, reflecting higher balances in residential mortgage and commercial loans [14] - Noninterest income rose to $11.8 million for Q3 2024, a 7% increase from the previous quarter, driven by higher gains on the sale of SBA loans [18] Market Data and Key Metrics Changes - Total deposits were stable at $14.7 billion, with a significant reduction in brokered deposits to 7% of the total mix, down from 14% a year prior [12] - The company sold $41 million of SBA loans during the quarter, contributing to the increase in noninterest income [19] Company Strategy and Development Direction - The company aims to grow market share and client relationships while generating profitable growth, supported by strong capital ratios and prudent balance sheet management [11][26] - The management is optimistic about the pending merger with Territorial Bancorp, which is expected to create significant value [31] Management's Comments on Operating Environment and Future Outlook - Management anticipates low single-digit growth in average loans and net interest income for Q4 2024, benefiting from positive loan growth and effective deposit rate management [28] - The company expects stable operating expenses and a consistent reserve coverage ratio of 113 basis points of loans as of September 30, 2024 [30] Other Important Information - The company declared a quarterly common stock dividend of $0.14 per share, payable on November 21, 2024 [11] - Nonperforming assets totaled $104 million, with a moderate net charge-off of $5.7 million for Q3 2024 [21][23] Q&A Session Summary Question: Update on loan portfolio regarding floating and fixed rates - The company reported that 45% of the loan portfolio consists of variable rate loans, with $766 million of fixed rate loans set to reprice in 2025 [33] Question: Deposit pricing strategy post-September rate cut - The company has reduced deposit costs across various accounts, with a beta of approximately 60% on adjusted rates, and average CD costs down to about 4.25% [34][40] Question: Credit quality and nonaccrual loans - Management indicated that the nonaccrual status of a relationship was due to a loan maturity, but the properties are well-secured, and they do not anticipate significant losses [38] Question: Spot yields on investment portfolio - The average spot yield on the investment portfolio was reported at 2.96%, with plans to reposition low-yielding securities [43] Question: Contribution of floating rate loans - The company clarified that the reported 40.5% of variable loans are truly floating, while 31% are hybrid loans [44]

Hope Bancorp (HOPE) reported $116.65 million in revenue for the quarter ended September 2024, representing a year-over-year decline of 18.8%. EPS of $0.21 for the same period compares to $0.25 a year ago. The reported revenue represents a surprise of -4.12% over the Zacks Consensus Estimate of $121.67 million. With the consensus EPS estimate being $0.22, the EPS surprise was -4.55%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wa ...

Company Performance - Hope Bancorp reported quarterly earnings of $0.21 per share, missing the Zacks Consensus Estimate of $0.22 per share, and down from $0.25 per share a year ago, representing an earnings surprise of -4.55% [1] - The company posted revenues of $116.65 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 4.12%, and down from $143.68 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates just once and has not been able to beat consensus revenue estimates [2] Stock Outlook - Hope Bancorp shares have added about 3.2% since the beginning of the year, underperforming the S&P 500's gain of 21.8% [3] - The current consensus EPS estimate for the coming quarter is $0.23 on revenues of $126.63 million, and for the current fiscal year, it is $0.87 on revenues of $488.53 million [7] - The estimate revisions trend for Hope Bancorp is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Zacks Industry Rank for Banks - West is currently in the bottom 44% of over 250 Zacks industries, suggesting that the industry outlook may negatively impact the stock's performance [8]